By saying "I may be rancid butter, but I'm on your side of the bread" Hornbeck is basically saying, yea, I'm a problem and I realize that but it is you that has to deal with me. Next, when he asks if someone wants a bite of his apple he makes a biblical reference to the tree of knowledge and simultaneously takes a shot at “Heavenly Hillsboro” claiming that there is no tree of knowledge in Hillsboro only “a few ignorance bushes”, by saying this he means that there is no one intelligent in Hillsboro only a few people who think they're intelligent.

Very Good explanation, especially the second part.
Could you explain your "rancid butter" comment a little further?